Trends in Housing Counseling Jamie Spakow U.S. Department of Housing and Urban Development Office of Housing Counseling October 17, 2017

Agenda Intro to the Office of Housing Counseling Research Housing Counselor Certification Resources and Other Information

HUD Office of Housing Counseling “The mission of the Office of Housing Counseling is to help families to obtain, sustain and retain their homes. We will accomplish this mission through a strong network of HUD-approved housing counseling agencies and counselors.” Network of approximately 1,900 housing counseling agencies HUD monitors compliance, conflicts of interest, and the quality of housing counseling HUD connects clients with participating housing counseling agencies through our website HUD provides grant funding for qualified applicants

National Housing Counseling Activity FY16 6/1/2018 Total Counseling Activity – 1,207,849 Clients

National Impact of One-on-One Counseling - FY16 388,581 Worked with housing counselor to develop a sustainable household budget 293,657 Received fair housing information 197,613 Improved financial capacity 190,106 Gained access to resources to help improve housing situation

Housing Counseling Works After four years, counseled borrowers had improved credit scores, less debt and fewer delinquencies. 2014 Federal Reserve Bank of Philadelphia Counseling reduces the delinquency rate by 29% for first time homebuyers and by 15% overall. 2013 Freddie Mac study Counseled homeowners were 2.83 times more likely to receive a modification, and at least 1.78 times more likely to cure a default, than similar non-counseled borrowers. 2014 Urban Institute Homebuyer education and counseling successfully encourage participants to communicate proactively and productively with their lenders in times of financial distress. 2016 First-Time Homebuyer Education and Counseling Demonstration: Early Insights Borrowers receiving pre-purchase counseling and education…are one-third less likely to become 90+ days delinquent over the two years after receiving their loan. 2013 Neil Mayer & Associates study The NeighborWorks homeownership education and counseling program works even when it serves more disadvantaged homebuyers in a tight-credit low-default housing market. 2016 Urban Institute Housing Finance Policy Center Research Report NeighborWorks borrowers were more likely to be African American, Hispanic, low income, or female than the general population of borrowers. This finding confirms our hypothesis that these housing counseling services are predominantly serving disadvantaged homebuyers to help them realize the American dream. 2016 Urban Institute Housing Finance Policy Center Research Report Borrowers who have undergone NeighborWorks pre-purchase counseling perform significantly better than those who do not. The default rate of loans are 16 percent lower than those of non-NeighborWorks loans. 2016 Urban Institute Housing Finance Policy Center Research Report

Housing Counselor Certification

Certification Exam HUD Certification is the baseline requirement of counselor knowledge HUD recognizes the importance of partnering with other standard-setting organizations to: Limit overlapping of testing content Ensure training beyond HUD-certification level requirements is considered advanced training

Key Provisions 6/1/2018 All housing counseling provided under or in connection with all HUD programs must be performed by a HUD Certified Housing Counselor. A HUD Certified Housing Counselor is a housing counselor who has passed the HUD certification examination and works for a HUD-approved housing counseling agency.

What is Housing Counseling? Housing Counseling is independent, expert advice customized to the need of the consumer to address the consumer’s housing barriers and to help achieve their housing goals. And must include the elements on the next slide

Housing Counseling Elements Intake Client budget Financial and housing affordability analysis An Action Plan, except for reverse mortgage counseling Referrals Reasonable effort on follow-up with client

What is Not Housing Counseling 6/1/2018 Services that provide housing information, or placement or referral services Routine administrative activities (e.g., program eligibility determinations, intake, case management) Case management that provides housing services as incidental to a larger case management (HOPWA, ESG, COC) and does not fund housing counseling Fair housing advice and advocacy (e.g. processing complaints and filing claims) Group education without individualized services

What is Group Education? 6/1/2018 Provided for one or more people (classroom, online, conference call or other delivery method) Major differences from Housing Counseling: Not customized for individual needs Does not offer individual financial analysis or a client action plan HUD approved Housing Counseling Agencies must offer counseling on the same topics as group education… … and a HUD certified housing counselor must oversee group education

Options for Affected Agencies 6/1/2018 Apply to HUD for approval or join a HUD-approved Intermediary or State Housing Finance Agency as an affiliate Partner with other HUD approved Housing Counseling Agencies Informal or formal referral agreement Funding agreements Modify the program to be compliant Stop delivering Housing Counseling services

Partnering with HUD Approved Agencies All counseling done in connection with all HUD programs will need to be performed by a HUD Certified Housing Counselor by August 1st, 2020 Other HUD funded agencies covered by the final rule not requesting HUD approval may need to partner with HUD approved Housing Counseling Agencies to provide counseling services Informal or formal referral agreement Potential funding agreements

Office of Housing Counseling Find us at: www.hudexchange.info/counseling Counselor Training and Testing website: www.hudhousingcounselors.com Email us at: Housing.counseling@hud.gov The Bridge: https://www.hudexchange.info/progra ms/housing-counseling/the-bridge/